SB 611
Department of Legislative Services
Maryland General Assembly
2021 Session
FISCAL AND POLICY NOTE
First Reader
Senate Bill 611 (Senator Pinsky)
Budget and Taxation
Individual Income Tax - Rates and Rate Brackets - Alterations
This bill alters the personal income tax by establishing new tax brackets and increasing
tax rates imposed including an increase in the top marginal tax rate from 5.75% to 7.50%.
The bill takes effect July 1, 2021, and applies to tax year 2021 and beyond.
Fiscal Summary
State Effect: General fund revenues increase by $377.6 million in FY 2022 due to the
income tax rates and brackets specified by the bill, reflecting the impact of about
one and one-half of a tax year. Future year estimates reflect annualization and the current
income tax revenue forecast. General fund expenditures may increase minimally in
FY 2022 due to one-time implementation costs at the Comptroller’s Office.
($ in millions) FY 2022 FY 2023 FY 2024 FY 2025 FY 2026
GF Revenue $377.6 $284.9 $296.3 $308.1 $320.4
GF Expenditure - $0 $0 $0 $0
Net Effect $377.6 $284.9 $296.3 $308.1 $320.4
Note:() = decrease; GF = general funds; FF = federal funds; SF = special funds; - = indeterminate increase; (-) = indeterminate decrease
Local Effect: None.
Small Business Effect: Meaningful.
Analysis
Current Law/Bill Summary: Exhibit 1 shows the State income tax rates under current
law. Exhibit 2 shows the State income tax rates proposed by the bill beginning in
tax year 2021.
 Exhibit 1
Maryland State Income Tax Rates
Current Law
Single, Dependent Filer,
Married Filing Separate Joint, Head of Household, Widower
Rate Maryland Taxable Income Rate Maryland Taxable Income
2.00% $1-$1,000 2.00% $1-$1,000
3.00% $1,001-$2,000 3.00% $1,001-$2,000
4.00% $2,001-$3,000 4.00% $2,001-$3,000
4.75% $3,001-$100,000 4.75% $3,001-$150,000
5.00% $100,001-$125,000 5.00% $150,001-$175,000
5.25% $125,001-$150,000 5.25% $175,001-$225,000
5.50% $150,001-$250,000 5.50% $225,001-$300,000
5.75% Excess of $250,000 5.75% Excess of $300,000
Exhibit 2
Maryland State Income Tax Rates
Proposed
Single, Dependent Filer,
Married Filing Separate Joint, Head of Household, Widower
Rate Maryland Taxable Income Rate Maryland Taxable Income
2.00% $1-$1,000 2.00% $1-$1,000
3.00% $1,001-$2,000 3.00% $1,001-$2,000
4.00% $2,001-$3,000 4.00% $2,001-$3,000
4.75% $3,001-$100,000 4.75% $3,001-$150,000
5.00% $100,001-$125,000 5.00% $150,001-$175,000
5.25% $125,001-$150,000 5.25% $175,001-$225,000
5.50% $150,001-$250,000 5.50% $225,001-$300,000
5.75% $250,001-$500,000 5.75% $300,001-$600,000
6.00% $500,001-$750,000 6.00% $600,001-$850,000
6.50% $750,001-$1,000,000 6.50% $850,001-$1,150,000
7.00% $1,000,001-$1,500,000 7.00% $1,150,001-$1,600,000
7.50% Excess of $1,500,000 7.50% Excess of $1,600,000
SB 611/ Page 2
State Revenues: The new State income tax rates and brackets under the bill take effect
beginning in tax year 2021. As a result, general fund revenues will increase by
$377.6 million in fiscal 2022, which reflects the impact of about one and one-half of a
tax year. Exhibit 3 shows the estimated impact of the bill on State revenues.
Exhibit 3
State Revenue Impacts
($ in Millions)
FY 2022 FY 2023 FY 2024 FY 2025 FY 2026
State Revenues $377.6 $284.9 $296.3 $308.1 $320.4
State Expenditures: The bill requires the Comptroller to waive any penalty or interest
imposed on an individual relating to the payment of estimated income taxes for
calendar 2021 to the extent that the Comptroller determines that the interest or penalty
would not have incurred but for an increase in the income tax rates for calendar 2021 under
the bill. General fund expenditures for the Comptroller’s Office may increase minimally in
fiscal 2022 in order to waive these penalties and interest and as a result of issuing new
employer withholding tables and altering the personal income tax forms.
Small Business Impact: Small businesses such as partnerships, S corporations,
limited liability companies, and sole proprietorships with higher net taxable incomes will
be adversely impacted by the proposed bracket and rate changes.
Additional Information
Prior Introductions: None.
Designated Cross File: None.
Information Source(s): Comptroller’s Office; Department of Legislative Services
Fiscal Note History: First Reader - February 22, 2021
rh/hlb
Analysis by: Robert J. Rehrmann Direct Inquiries to:
(410) 946-5510
(301) 970-5510
SB 611/ Page 3


Statutes affected:
Text - First - Individual Income Tax - Rates and Rate Brackets - Alterations: 10-105 Tax General